Undernews For May 14, 2009

THE PROGRESSIVE REVIEW
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Editor: Sam Smith

14 MAY 2009

WORD
Some cause happiness wherever they go; others, whenever they go. - Oscar Wilde
PAGE ONE MUST

HEY, IT WORKED FOR HITLER DIDN'T IT? EXPLORER SCOUTS BEING TAUGHT HOW TO KILL

MORE PHOTOS

NY Times, Imperial CA - Ten minutes into arrant mayhem in this town near the Mexican border, and the gunman, a disgruntled Iraq war veteran, has already taken out two people, one slumped in his desk, the other covered in blood on the floor.

The responding officers - eight teenage boys and girls, the youngest 14 - face tripwire, a thin cloud of poisonous gas and loud shots - BAM! BAM! - fired from behind a flimsy wall. They move quickly, pellet guns drawn and masks affixed.

"United States Border Patrol! Put your hands up!" screams one in a voice cracking with adolescent determination as the suspect is subdued.

It is all quite a step up from the square knot.

The Explorers program, a coeducational affiliate of the Boy Scouts of America that began 60 years ago, is training thousands of young people in skills used to confront terrorism, illegal immigration and escalating border violence - an intense ratcheting up of one of the group's longtime missions to prepare youths for more traditional jobs as police officers and firefighters.

"This is about being a true-blooded American guy and girl," said A. J. Lowenthal, a sheriff's deputy here in Imperial County, whose life clock, he says, is set around the Explorers events he helps run. "It fits right in with the honor and bravery of the Boy Scouts."

The training, which leaders say is not intended to be applied outside the simulated Explorer setting, can involve chasing down illegal border crossers as well as more dangerous situations that include facing down terrorists and taking out "active shooters," like those who bring gunfire and death to college campuses. In a simulation here of a raid on a marijuana field, several Explorers were instructed on how to quiet an obstreperous lookout.

"Put him on his face and put a knee in his back," a Border Patrol agent explained. "I guarantee that he'll shut up."

One participant, Felix Arce, 16, said he liked "the discipline of the program," which was something he said his life was lacking. "I want to be a lawyer, and this teaches you about how crimes are committed," he said.

Cathy Noriego, also 16, said she was attracted by the guns. The group uses compressed-air guns - known as airsoft guns, which fire tiny plastic pellets - in the training exercises, and sometimes they shoot real guns on a closed range.

"I like shooting them," Cathy said. "I like the sound they make. It gets me excited.". . .

Many law enforcement officials, particularly those who work for the rapidly growing Border Patrol, part of the Homeland Security Department, have helped shape the program's focus and see it as preparing the Explorers as potential employees. The Explorer posts are attached to various agencies, including the Federal Bureau of Investigation and local police and fire departments, that sponsor them much the way churches sponsor Boy Scout troops.

"Our end goal is to create more agents," said April McKee, a senior Border Patrol agent and mentor at the session here.
HEALTH CZAR IS WALKING CONFLICT OF INTEREST
According to the Washington Post, Obama's healthcare czar, Nancy-Ann DeParle "has thrived in the private sector, first at J.P. Morgan Partners and then at a private-equity spinoff, CCMP Capital. She earned more than $2 million in the past two years on corporate boards such as DaVita, Boston Scientific, Cerner and Medco Health Solutions, according to public records. Her financial disclosure form is pending."

You don't get a much better conflict of interest that this. Here is are the Wikipedia summaries of her corporate connections:

Medco provides pharmacy services for private and public employers, health plans, labor unions and government agencies of all sizes, and for individuals served by Medicare Part D Prescription Drug Plans. Through its Medco Therapeutic Resource Centers and the Accredo Health Group, Medco's Specialty Pharmacy, the company provides services for the care of patients with chronic and complex conditions. Medco is a leader in the emerging field of personalized medicine and in applying evidence-based protocols to elevate the practice of pharmacy - a key element in reforming America's health care system. Medco is ranked number 51 on the Fortune 500 list, with 2008 revenues of more than $51 billion.

Medco became an independent in August 2003. As a subsidiary of Merck & Co., Inc, the company was known as Merck-Medco Managed Care. . .

Medco's mail-order business, which generated $22 billion in 2008 net revenues, is one of the largest pharmacy operations in the United States. Medco managed 586 million prescriptions in 2008, including 105.8 million prescriptions dispensed at its mail-order pharmacies - significantly more than the number of prescriptions dispensed by the mail-order operations of its two largest PBM competitors. Medco operates nine mail-order pharmacies and six call center pharmacies, and it partners with a nationwide network of approximately 60,000 retail pharmacies. Medco's automated pharmacies located in Las Vegas and Willingboro, NJ, together have the capacity to fill more than 2 million prescriptions per week. Medco commenced construction of a third, next-generation automated dispensing pharmacy in Whitestown, Indiana, which is expected to be operational by late 2009. Medco holds 27 U.S. patents for patient data management, front-end pharmacy technology and automated pharmacy technology.

In 2004 Medco settled a lawsuit brought by 20 states alleging that they failed to disclose incentives they received from drug companies and improperly switched or pressured doctors to switch patient's medication in pursuit of profit.

In 2005 Medco acquired Accredo Health for $2.2 billion, a large specialty pharmaceutical operation, including a division that Accredo Health purchased from Gentiva Health Services in 2002.

Cerner Corporation is an international IT corporation in the healthcare industry with more than 7,800 employees. . . Cerner has more than 6,000 clients worldwide

The Boston Scientific Corporation is a worldwide developer, manufacturer and marketer of medical devices whose products are used in a range of interventional medical specialties, including interventional cardiology, peripheral interventions, neuromodulation, neurovascular intervention, electrophysiology, cardiac surgery, vascular surgery, endoscopy, oncology, urology and gynecology.

Boston Scientific's main competitors are Johnson & Johnson, Medtronic, and St. Jude Medical. The company recently acquired longtime competitor Guidant for approximately $27 billion. The former Guidant was split between BSC and Abbott Laboratories.

DaVita is one of the largest kidney care companies in the United States. Their offerings include in-center hemodialysis, peritoneal dialysis, home hemodialysis, vascular access management, chronic kidney disease education, and renal diet assistance.
AVOID SOCIALISM OR YOU COULD END UP LIKE NORWAY
NY Times - When capitalism seemed on the verge of collapse last fall, Kristin Halvorsen, Norway's Socialist finance minister and a longtime free market skeptic, did more than crow. As investors the world over sold in a panic, she bucked the tide, authorizing Norway's $300 billion sovereign wealth fund to ramp up its stock buying program by $60 billion - or about 23 percent of Norway 's economic output.

"The timing was not that bad,"� Ms. Halvorsen said, smiling with satisfaction over the broad worldwide market rally that began in early March.

The global financial crisis has brought low the economies of just about every country on earth. But not Norway. . .

And in the midst of the worst global downturn since the Depression, Norway's economy grew last year by just under 3 percent. The government enjoys a budget surplus of 11 percent and its ledger is entirely free of debt.

By comparison, the United States is expected to chalk up a fiscal deficit this year equal to 12.9 percent of its gross domestic product and push its total debt to $11 trillion, or 65 percent of the size of its economy.

Norway is a relatively small country with a largely homogeneous population of 4.6 million and the advantages of being a major oil exporter. It counted $68 billion in oil revenue last year as prices soared to record levels. Even though prices have sharply declined, the government is not particularly worried. That is because Norway avoided the usual trap that plagues many energy-rich countries.

Instead of spending its riches lavishly, it passed legislation ensuring that oil revenue went straight into its sovereign wealth fund, state money that is used to make investments around the world. Now its sovereign wealth fund is close to being the largest in the world, despite losing 23 percent last year because of investments that declined.

Norway's relative frugality stands in stark contrast to Britain, which spent most of its North Sea oil revenue - and more - during the boom years. Government spending rose to 47 percent of G.D.P., from 42 percent in 2003. By comparison, public spending in Norway fell to 40 percent from 48 percent of G.D.P.

"The U.S. and the U.K. have no sense of guilt," said Anders Aslund, an expert on Scandinavia at the Peterson Institute for International Economics in Washington. "But in Norway, there is instead a sense of virtue. If you are given a lot, you have a responsibility.". . .

Norwegian banks, said Arne J. Isachsen, an economist at the Norwegian School of Management, remain largely healthy and prudent in their lending. Banks represent just 2 percent of the economy and tight public oversight over their lending practices have kept Norwegian banks from taking on the risk that brought down their Icelandic counterparts. But they certainly have not closed their doors to . . .
MERCENARIES WILL MORE THAN DOUBLE U.S. FORCE IN AFGHANISTAN
Kelley B. Vlahos, Anti-War - Just like in Iraq, a "shadow army" has been serving alongside American servicemen and women in Afghanistan. So far, it is at least 70,000 strong. Private contractors – now indispensable to the U.S. military as it wages war – are expected to grow and much surpass that number as U.S. troops there double from 35,000 to nearly 70,000 by 2010.

"In short, we will be bringing as many contractors as we are troops – especially KBR [Kellogg, Brown and Root] - because they now feed and house the military, and the military has no real choice, because they have let that part of their logistics atrophy," pointed out Dina Rasor, director of the Follow the Money Project and co-author of Betraying our Troops: The Destructive Results of Privatizing War.
HEALTHCARE MALPRACTICE
WOLF BLITZER, CNN: Will this be a single payer system along the lines of Medicare?

HUMAN SERVICES SECRETARY KATHLEEN SEBELIUS: No. I think that what the president has made it very clear is he wants to actually build on the supporting system. There are about 85 million Americans who have employer-based health coverage and are very satisfied -- a lot of them are very satisfied with the coverage they have. They don't know what's going to happen to the cost...

BLITZER: So you don't want to simply expand Medicare to include everyone?

SEBELIUS: That's correct.

BLITZER: But there are some who would like to do that.

SEBELIUS: There -- there definitely are some single-payer advocates. But that is not the president's proposal, and I think he -- he thinks choice, that Americans should have choice of doctors and providers, have an opportunity to keep that coverage that they have, if they like their coverage.

Robert Reich - Fifteen years ago, when I was a trustee of the Social Security and the Medicare trust funds (which meant, essentially, that I and a few others met periodically with the official actuary of the funds, received his report, asked a few questions, and signed some papers) both funds were supposedly in trouble. But as I learned, the timing and magnitude of the trouble depended a great deal on what assumptions the actuary used in his models. As I recall, he then assumed that the economy would grow by about 2.6 percent a year over the next seventy-five years. But go back into American history all the way to the Civil War -- including the Great Depression and the severe depressions of the late 19th century -- and the economy's average annual growth is closer to 3 percent. Use a 3 percent assumption and Social Security is flush for the next seventy-five years. .

Even if you assume Social Security is a problem, it's not a big problem. Raise the ceiling slightly on yearly wages subject to Social Security payroll taxes (now a bit over $100,000), and the problem vanishes under harsher assumptions than I'd use about the future. President Obama suggested this in the campaign and stirred up a hornet's nest because this solution apparently dips too deeply into the middle class, which made him backtrack and begin talking about raising additional Social Security payroll taxes on people earning over $250,000. Social Security would also be in safe shape if it were slightly more means tested, or if the retirement age were raised just a bit. The main point is that Social Security is a tiny problem, as these things go. . .

Don't be confused by these alarms from the Social Security and Medicare trustees. Social Security is a tiny problem. Medicare is a terrible one, but the problem is not really Medicare; it's quickly rising health-care costs. Look more closely and the real problem isn't even health-care costs; it's a system that pushes up costs by rewarding inefficiency, causing unbelievable waste, pushing over-medication, providing inadequate prevention, over-using emergency rooms because many uninsured people can't afford regular doctor checkups, and spending billions on advertising and marketing seeking to enroll healthy people and avoid sick ones.
TWITTER COMES AND GOES IN MULTNOMAH COUNTY
KATU, Portland OR - Multnomah County has a new job opening for a 'social media expert' but is creating this position the best use of your tax dollars during a budget crunch?

Multnomah County Chair Ted Wheeler, who sees social networking sites like Facebook and Twitter as the future of communicating with his constituents, believes the job is essential. And he's willing to pay someone $60,000 to $70,000 a year to manage it.

He said an online video an intern in his office produced about the Sellwood Bridge is a good example of the power of social media.

"We had thousands of people see that video," he said. "It went out on one Twitter. We cannot buy that kind of exposure. That's the way people communicate. It's viral."

"These technologies are not just fringe technologies," he added. "People are signing up for social networking by the millions. That's where our constituents are. That's were the people are who we serve."

But not everyone is a fan of the idea, especially since the position would be paid for with taxpayer dollars.

KXL Radio's Lars Larson took Wheeler to task for offering the position, especially in the middle of major budget problems.

"How is it that county government got by all this time without one but now it's going to cost, is it $70,000 plus benefits?" he said on his show.

. . It's a connection that for Wheeler means more government accountability - and more Facebook friends and Twitter followers.

Wheeler believes the position is so essential that he took a 12 percent pay cut, along with the rest of of his staff, to pay for it.

Update. . .

KATU - Multnomah County Chair Ted Wheeler has pulled the plug on a controversial plan to hire someone as a Social Media Coordinator. . .

Willamette Week reports that some county workers, faced with layoffs, confronted Wheeler at a brown bag lunch, asking him why he planned to hire a new county worker as dozens of others are about to lose their jobs to budget cuts.

Wheeler said he wanted to pay for the position by cutting his salary and the salaries of others who work in the county's Public Affairs office. But he now admits there is no way to justify the position, given budget cuts and layoffs. . .

Instead of opening up a new position, Wheeler said the county will use its current communications staff to look at more creative ways to use social media. He said he wants to continue embracing new social networking technology because it's another way for taxpayers to know what government is doing, and it can help hold public employees accountable.
PROBLEMS WE HADN'T STARTED WORRYING ABOUT YET
Guardian, UK - Beekeepers stung by pestilence and poor weather are being warned to protect their hives from rustlers as thefts rise to unprecedented levels due to a national shortage of bees.

The sharp decline in Britain's honeybee population following the arrival of varroa mites and two consecutive harsh winters has led to premium prices for top-quality bees and a black market trade in stolen hives. In the latest incident, more than a million were taken from a strawberry farm near Telford, Shropshire. Thefts of 12 hives in Whitby, North Yorkshire, and three from the New Forest in Hampshire have also been reported, as well as cases in Norfolk and the West ¬Country. . .

Experts believe the bees may have been stolen to order, destined for beekeepers whose own hives have failed.

Second-hand hives that used to sell for L30 can now fetch more than L200. With each hive capable of producing around 50lb of honey a year, victims stand to lose thousands of pounds.

And the culprits may be in the beekeeping community. Tim Lovett, president of the British Beekeepers Association, said: "To steal bees, you have to know what you are doing. Beekeepers are now on the lookout. It's a vicious circle. You lose more bees, the price of bees goes up and the risk of them being stolen goes up."

posted by TPR | 4:58 PM | 0 Comments
BOOKSELF: INEQUALITY IS BAD EVEN FOR THOSE AT THE TOP
THE SPIRIT LEVEL
Why More Equal Societies Almost Always Do Better

Richard Wilkinson and Kate Pickett

John Carey, Sunday Times, UK - This is a book with a big idea, big enough to change political thinking, and bigger than its authors at first intended. The problem they originally set out to solve was why health within a population gets progressively worse further down the social scale; they estimate that together they have clocked up more than 50 person-years gathering information from research teams across the globe. Their eureka moment came when they thought of putting the medical data alongside figures showing the extent of economic inequality within each country. They say modestly that since dependable statistics both on health and on income distribution are internationally available, it was only a matter of time before someone put the two together. All the same, they are the first to have done so.

Their book charts the level of health and social problems - as many as they could find reliable figures for - against the level of income inequality in 20 of the world's richest nations, and in each of the 50 United States. They allocate a brief chapter to each problem, supplying graphs that display the evidence starkly and unarguably. What they find is that, in states and countries where there is a big gap between the incomes of rich and poor, mental illness, drug and alcohol abuse, obesity and teenage pregnancy are more common, the homicide rate is higher, life expectancy is shorter, and children's educational performance and literacy scores are worse. The Scandinavian countries and Japan consistently come at the positive end of this spectrum. They have the smallest differences between higher and lower incomes, and the best record of psycho-social health. The countries with the widest gulf between rich and poor, and the highest incidence of most health and social problems, are Britain, America and Portugal.

Richard Wilkinson, a professor of medical epidemiology at Nottingham University, and Kate Pickett, a lecturer in epidemiology at York University, emphasize that it is not only the poor who suffer from the effects of inequality, but the majority of the population. For example, rates of mental illness are five times higher across the whole population in the most unequal than in the least unequal societies in their survey. One explanation, they suggest, is that inequality increases stress right across society, not just among the least advantaged. . .

Societies where incomes are relatively equal have low levels of stress and high levels of trust, so that people feel secure and see others as co-operative. In unequal societies, by contrast, the rich suffer from fear of the poor, while those lower down the social order experience status anxiety, looking upon those who are more successful with bitterness and upon themselves with shame. . .
OBAMA, MEDIA LAUNCH WAR ON SOCIAL SECURITY & MEDICARE
Bankers' capo Geithner leads the charge

Washington Post - The financial health of the Social Security system has eroded more sharply in the past year than at any time since the mid-1990s, according to a government forecast that ratchets up pressure on the Obama administration and Congress to stabilize the retirement system that keeps many older Americans out of poverty.

The report, issued by the trustees who monitor the government's two main forms of help for the elderly, shows that Medicare has become more fragile as well and is at greater risk than Social Security of imminent fiscal collapse. Starting eight years from now, the report says, the health insurance program will be unable to pay all its hospital bills.. .

In announcing the results of the trustees' annual forecast with other Cabinet members, Treasury Secretary Timothy F. Geithner said, "The president explicitly rejects the notion that Social Security is untouchable politically." Still, he reiterated that the administration intends to "work to build a bipartisan consensus to ensure the long-term solvency of Social Security" only after it collaborates with Congress to slow health-care spending and enable more Americans to obtain medical insurance.

Administration officials said that if Congress were to act immediately, the impending gap could be filled three ways: by raising workers' Social Security payroll taxes by 2 percentage points, from 12.4 percent to 14.4 percent; by reducing benefits by 13 percent; or a combination of the two approaches. The officials briefed reporters on the condition of anonymity on the technical aspects of the trustees' findings.

Note the lack of mention of raising the income cap on Social Security taxes

Medicare's financial health, the report shows, deteriorated less sharply in the past year than Social Security's, but it remains the more urgent problem. The trust fund that pays for hospital care under Medicare is now predicted to run out of money in 2017, two years earlier than forecast a year ago. That fund does not involve the parts of Medicare that cover doctor's visits or coverage for prescription drugs. . .

Some key lawmakers in both parties have said they want to devise a plan to keep the retirement program solvent by increasing the retirement age, slowing the growth in the size of retirement checks to wealthy Americans and bringing in new revenue.

William Greider, Nation, March 2, 2009 - Governing elites in Washington and Wall Street have devised a fiendishly clever "grand bargain" they want President Obama to embrace in the name of "fiscal responsibility." The government, they argue, having spent billions on bailing out the banks, can recover its costs by looting the Social Security system. They are also targeting Medicare and Medicaid. The pitch sounds preposterous to millions of ordinary working people anxious about their economic security and worried about their retirement years. But an impressive armada is lined up to push the idea--Washington's leading think tanks, the prestige media, tax-exempt foundations, skillful propagandists posing as economic experts and a self-righteous billionaire spending his fortune to save the nation from the elderly.

These players are promoting a tricky way to whack Social Security benefits, but to do it behind closed doors so the public cannot see what's happening or figure out which politicians to blame. The essential transaction would amount to misappropriating the trillions in Social Security taxes that workers have paid to finance their retirement benefits. This swindle is portrayed as "fiscal reform." In fact, it's the political equivalent of bait-and-switch fraud. . .

Obama is playing footsie with the conservative advocates of "entitlement reform" (their euphemism for cutting benefits). The president wants the corporate establishment's support on many other important matters, and he recently promised to hold a "fiscal responsibility summit" to examine the long-term costs of entitlements. That forum could set the trap for a "bipartisan compromise" that may become difficult for Obama to resist, given the burgeoning deficit. If he resists, he will be denounced as an old-fashioned free-spending liberal. The advocates are urging both parties to hold hands and take the leap together, authorizing big benefits cuts in a circuitous way that allows them to dodge the public's blame. . .

OMB Watch 2008 - At its peak in 2030, Social Security will cost 1.7 percent of GDP more than it does today - keep in mind, too, that in 2030, Social Security is still solvent. That's not pocket change, but it's not the soul-crushing, economy-killing, puppy-eating monster that Entitlement Crisis Henny Pennys make it out to be. To put into perspective, if President Bush's FY 2008 war supplemental request is fulfilled, that $196 billion would represent about 1.4 percent of current GDP. And while the war is an expensive project, it's hardly bringing the economy to a halt.

Dean Baker, Prospect, 2007 - The Social Security tax is very regressive. Its regressivity can be justified by the progressive payback structure of the program. However, if the benefits are cut, at a point when the program can still easily afford the benefits (e.g. 10-20 years), then the government has effectively stolen from the people who paid Social Security taxes. There are many people who want to do this - effectively default on the government bonds held by the Social Security trust fund.

David R. Francis, Christian Science Monitor, 2006 - Social Security's chief actuary, Stephen Goss, admitted at a meeting six or so years ago with the staff of Sen. Tom Harkin (D) of Iowa that the politically appointed trustees set the assumptions for Social Security projections, recalls economist Dean Baker, who attended the session. "It is such a secretive process," Mr. Baker complains. . .

One factor alone points up the difficulty of long-term forecasts: The trustees assume that annual productivity growth in the US will average 1.7 percent over the 75-year planning period. Both the Congressional Budget Office and the Office of Management and Budget assume that rate of growth will be 2.1 percent

Progressive Review, 2005 - From the beginning of the Social Security scare, one journalist has gotten it right: Doug Henwood of the Left Business Observer. In t he most recent issue, Henwood points out that "The ludicrously dire projections for Social Security's future only make sense when they're considered as part of a massive propaganda campaign to promote the privatization of Social Security, a long-standing obsession of the U.S. right largely unshared by the broader population.
SOCIAL SECURITY PROJECTIONS DON'T COMPUTE

Fair Economy - A new report finds that CEOs of Wall Street firms supporting the partial privatization of Social Security effectively pay into the system for only a few days a year. That is because Social Security tax payments are capped. The CEO of Charles Schwab, David Pottruck, finished paying his Social Security taxes before the end of the Rose Bowl on January 1st.

While 94 percent of workers effectively pay 12.4 percent of their annual income, including employer's contribution, these CEOs pay an average effective rate of 0.16 percent of their annual income toward Social Security taxes. The average taxpayer pays an effective rate that is more than 201 times the effective rate of the average CEO in this group.
BANKS THAT WORK: CREDIT UNIONS
Bob Fitrakis & Harvey Wasserman, Counterpunch - As hundreds of our hard-earned billions are being poured into corrupt, greed-driven, lethally inefficient banks, the Administration, Congress and corporate media have studiously avoided the one sector of the banking industry that actually works---the credit unions.

Throughout the United States there are hundreds of these people-powered banks that have succeeded and prospered while all around them the traditional banking has collapsed into ruin, taking our general economy with them.

Why? Because unlike those private banks, the America's 10,000 not-for-profit credit unions are controlled by the people who deposit their money there. Loans are made only to members. The deposits are federally insured, and investments are monitored by the depositors and, allegedly, by federal regulators.

For the most part, their decisions are made democratically. Their boards of directors are elected. Increasingly those decisions have been oriented funneling resources into new green industries whose future is bright, and that actually serve that public rather than raping it.

To be sure, there are those credit unions that are plagued with problems. Like all institutions, they all have their flaws. As creatures of the democratic process, they are capable of making wrong decisions while driving those involved stark raving mad.

But by basic mandate, credit unions are accountable, a concept almost completely lacking from those mega-banks "too big to let fail."
CRASH TALK
Reuters- A Federal Reserve policy maker called for U.S. government protection of the financial industry to be rolled back because it had encouraged excessive risk taking at the heart of the current crisis.

"The financial safety net, especially those parts that were more implicit and perceived than explicit and written into the laws, played a significant role in the accumulation of risks that ultimately led to the turmoil we are still experiencing," said Richmond Federal Reserve President Jeffrey Lacker.

"While deployment of the financial safety net is often viewed as an essential response to the financial crisis, I believe we need to give serious thought to the extent to which the safety net was actually a significant cause of the crisis," he said in remarks prepared for delivery to a banking conference in Beijing. . .

"The confidence [TARP] has given that institutions will in short order escape the need for government support has done more to facilitate the process of private equity recapitalization than the other programs," Lacker said in response to questions at the forum.

He was referring to TARP, or the Troubled Asset Relief Program, a $700 billion U.S. government fund set up to support banks.

Lacker has been an outspoken critic of the government bailouts to shore up U.S. banks and the implicit backing of firms that are deemed 'too-big-to-fail.'

"The existence of our financial safety net actually can amplify financial instability," he said in his speech.

"A discretionary safety net in particular, creates incentives for "too-big-to-fail" institutions to pay little attention to and underprice some of the biggest risks we face," he said.

Such overt optimism led to massive bets on the U.S. housing market as home prices soared, then to savage losses, including on assets that banks moved off their balance sheets via securitization. . .

The Fed has said on numerous occasions during the crisis that it needs new powers to wind down systemically important financial firms as a remedy for the 'too-big-to-fail" problem.

Lacker said such powers would be welcome, but urged that the use of public money to bail out creditors is closely controlled.

"I would prefer a mechanism that puts credible constraints on discretionary extensions of the safety net," he said.
COURT OKAYS FORECLOSURE ON GOTTI ESTATE . . . BUT NOT UNTIL DELINQUENCY HIT $650K
NY Post - The bank has been given the go-ahead to foreclose on Victoria Gotti's palatial estate on Long Island -- the same used in the TV reality show "Growing Up Gotti" -- saying she owes a whopping $650,000 in mortgage payments, according to court paper made public today.

Gotti's lender, JP Morgan Chase, claims the daughter of the late Gambino crime family boss John "Dapper Don" Gotti -- owes them the staggering amount after she failed to make payments for two years starting in September 2006, court records reveal. . .

The ruling reversed a 2007 decision by Nassau County Supreme Court Justice Roy Mahon who determined foreclosure proceedings were too early at the time. . .

The home, which Gotti once tried to sell at $4.8 million but lowered once she put on the market this past January for $3.2 million, became known to TV viewers across the country after A&E filmed the reality show, "Growing Up Gotti" there in 2004 and 2005.
ONE REASON THE DEMOCRATS MAY BE NERVOUS ABOUT INVESTIGATING TORTURE AND RENDITIONS
MSNBC - At a hearing with Attorney General Eric Holder, Republican members of [a Senate committee] suggested that any potential criminal investigation into the CIA's harsh interrogation methods might not easily be contained. Both Lamar Alexander of Tennessee and Richard Shelby of Alabama pressed Holder on the CIA's "rendition" program that moved terrorism suspects from one country to another.

Didn't that happen during the Clinton administration? Yes, Holder said.

"How many did you approve?" they asked. Holder said he'd check the record.

The clear suggestion was, if any criminal investigation is opened, Republicans would push to get it expanded beyond events during the Bush administration. Alexander, for example, asked several times whether members of Congress, who were told about the interrogation methods, should also be investigated.
POPULISM: WHAT HISTORIANS AND THE MEDIA DON'T TELL YOU
Jim Hightower, The Hightower Lowdown - Populism is not a style, nor is it a synonym for "popular outrage." It is a historically grounded political doctrine (and movement) that supports ordinary folks in their ongoing democratic fight against the moneyed elites.

The very essence of populism is its unrelenting focus on breaking the iron grip that big corporations have on our country--including on our economy, government, media, and environment. It is unabashedly a class movement. . .

Fully embracing the egalitarian ideals and rebellious spirit of the American Revolution, populists have always been out to challenge the orthodoxy of the corporate order and to empower workaday Americans so they can control their own economic and political destinies. This approach distinguishes the movement from classic liberalism, which seeks to live in harmony with concentrated corporate power by trying to regulate its excesses.

We're seeing liberalism at work today in Washington's Wall Street bailout. Both parties tell us that AIG, Citigroup, Bank of America, and the rest are "too big to fail," so taxpayers simply "must" rescue the management, stockholders, and bondholders of the financial giants in order to save the system. Populists, on the other hand, note that it is this very system that has caused the failure-so structural reform is required. Let's reorganize the clumsy, inept, ungovernable, and corrupt financial system by ousting those who wrecked it, splitting up its component parts (banking, investment, and insurance), and establishing decentralized, manageable-sized financial institutions operating on the locally controlled models of credit unions, co-ops, and community banks. . .

The true portrait of populism is rarely on public display. History teachers usually hustle students right past this unique moment in the evolution of our democracy. You never see a movie or a television presentation about the movement's innovative thinkers, powerful orators, and dramatic events. National museums offer no exhibits of its stunning inventions and accomplishments. And there is no "populist trail of history" winding through the various states in which farmers and workers created the People's Party (also known as the Populist Party), reshaped the national political debate, forced progressive reforms, delivered a million votes (and four states) to the party's 1892 presidential candidate, and elected 10 populist governors, six U.S. senators, and three dozen House members.

This was a serious, thoughtful, determined effort by hundreds of thousands of common folks to do something uncommon: organize themselves so--collectively and cooperatively--they could remake both commerce and government to serve the common good rather than the selfish interests of the barons of industry and finance.

While the big media of that day portrayed the movement as an incoherent bunch of conspiracy-minded bumpkins, the populists were in fact guided by a sophisticated network of big thinkers, organizers, and communicators who had a thorough grasp of exactly how the system worked and why. Most significantly, they were problem solvers--their aim was not protest, but to provide real mechanisms that could decentralize and democratize power in our country. The movement was able to rally a huge following of hard-scrabble farmers and put-upon workers because it did not pussyfoot around. Its leaders dared to go right at the core problem of an overreaching corporate state controlled by robber barons. Populist organizers spoke bluntly about the need to restructure the corporate system that was undermining America's democratic promise. . .

Ultimately, the Populists were undone, not by their boldness, but by leaders who urged them to compromise and to merge their aspirations into the Democratic Party. In the presidential election of 1896, they nominated the Democratic candidate William Jennings Bryan, whose "cross of gold" campaign focused on the monetary issue, avoiding the much more appealing structural radicalism of Populism. Outspent five to one, Bryan lost a close race to William McKinley, the Republican who was financed and owned by Wall Street. . .

The party was killed off, but not the Populist spirit. Persevering in separate political forms, the constituent components of populism--including unionists, suffragists, anti-trusters, socialists, cooperativists, and rural organizers--continued the struggle against America's economic and political aristocracy. Indeed, populists defined the content of national politics for the first third of the 20th century, forcing the Democratic Party to adopt populist positions, spawning the Progressive Party, elevating two Roosevelts to the presidency, and enacting major chunks of the agenda first drawn up by the People's Party.

MUCH MORE
OBAMA'S HEALTHCARE REFORM MALPRACTICE
Josiah Swampoodle - The only people Obama and congressional leaders are barring from the table in discussions of healthcare reform are people who advocate healthcare reform. You can't solve a problem by only talking to those who created it.

James Ridgway, Unsilent Generation - In a much-anticipated statement, Barack Obama announced what is largely a public relations end-run by the health care industry, designed to trim a few scraps off of the nation's porcine health care budget, while preserving its basic system of medicine for profit.

Executives from the Advanced Medical Technology Association (the medical device manufacturers lobbying group), the American Hospital Association, the American Medical Association, America's Health Insurance Plans, and the Pharmaceutical Research and Manufacturers of America, as well as the Service Employees International Union, pleged to "do our part" to reduce health care costs. Their vague, pie-in-the sky promise amounts to just a 1.5 percent reduction in the growth rate of health care spending. Such is the explosion in health care costs that even this miniscule reduction represents a potential $2 trillion saving over 10 years. But there's no guarantee this figure will be achieved. As the Washington Post points out:

"The groups did not spell out yesterday how they plan to reach such a target, and. . . they offer only a broad pledge, not an outright commitment. . . .In addition, White House officials said, there is no mechanism to ensure that the groups live up to their offer, only the implicit threat of public embarrassment."

Public embarrassment" By Big Pharma and the health insurance companies–two of the most shameless industries in the history of corporate capitalism? In any case, even if the $2 trillion reduction is achieved, it clearly won't come out of industry profits. The Post reports:

"Signers of the letter said that large amounts could be saved by aggressive efforts to prevent obesity, coordinate care, manage chronic illnesses and curtail unnecessary tests and procedures; by standardizing insurance claim forms; and by increasing the use of information technology, like electronic medical records."

So let's get this straight: Saving all this money depends on getting Americans to eat less? Good luck with that one. And the other brilliant cost-saving measures involve getting doctors to create computer records of all the overpriced drugs they prescribe to patients, and giving patients easier forms to fill out before they get turned down six times by their private insurance companies?

Do you see a pattern here? None of these changes would make a dent in the industry's bottom line - and what's more, they could even enhance profits, by encouraging government-funded programs to help private companies streamline their bloated bureaucracy (much of which would instantly become superfluous under a public, single-payer system. . .

And what might the industry get in return for this generous "cooperation"? The Kaiser Daily Health Policy report today rounded up the possibilities:

"The [Wall Street] Journal reports that although the groups did not ask for anything in return for the pledge, many of the factions are looking to prevent regulations that could "pose new burdens" or affect their profitability. For example, the health insurance industry is seeking to offset any reductions to their payments by obtaining new rules that would require all U.S. residents to have health coverage, according to the Journal. The Journal reports that health insurers have made several concessions intended to prevent a public option - which they fear could affect their profitability - as part of reform legislation . . .

In other words, the underlying purpose of this PR stunt is to slow or block any meaningful health care reform, which could actually improve care while reducing the price tag by a lot more than 1.5 percent. . .

ABC News -While the country's health care leaders pledged Monday to reduce the annual growth of health spending by 1.5 percentage points -- which they say will save $2 trillion in 10 years -- some health policy experts say that it is unlikely that Americans will see any of this money returning to their own pocketbooks, despite the crippling health care costs that some face. . .

Karen Davis, president of the health care foundation the Commonwealth Fund, said the public would likely share the trillions of dollars saved by the year 2019.

"Administration officials calculate that this 1.5 percentage point reduction will produce an average savings of $2,500 for a family of four in the fifth year," Davis said. "This is clearly a step in the right direction."

But Ted Marmor, professor of Public Policy and Management at the Yale School of Management, called such expectations "wishful thinking."

"I think that if you were a betting person, you'd lose a lot on that bet," Marmor said. "This is utterly unrealistic."

Part of the problem, Marmor said, is that even with the 1.5 percent reduction, health costs will still be growing at a projected rate of 4.7 percent per year.

Even then, he added, the steps that the stakeholders would have to take to achieve even this reduction would require a significant deviation from the status quo.

"All of [the changes] are much harder to do than is being suggested here," Marmor said. "Customary practice is very hard to change."

John Graham, director of Health Care Studies at the Pacific Research Institute in San Francisco, Calif., had an even more pointed response to the effort.

"If the interest groups in any other American industry colluded on a plan to control costs, they'd be charged under the anti-trust laws," Graham said. "The American people should not tolerate health-care interest groups collaborating with the government to form the mother of all cartels, rationing our health care to adhere to a federal budget."

Craig Crawford, CQ Politics - While President Barack Obama courts the health care industry his administration is distancing itself from big labor's plan to expand Medicare. In a round of interviews, Health and Human Services Secretary Kathleen Sebelius completely ruled out making Medicare available to more Americans as part of the president's health reform package.

But that is exactly what one of Obama's staunchest campaign supporters, the AFL-CIO, is calling for. The labor giant's retiree advocates, the Alliance for Retired Americans, is observing Older Americans Month on its website by urging the federal government to lower Medicare eligibility to age 55 from age 65, the current floor for accessing the government-sponsored program.

If Obama were not trying to please private industry, the labor union's plan would make the most sense. The trouble with expanding Medicare is that such a move diminishes the market share for private insurance companies.
Expanding Medicare, while possibly the best solution for average Americans, would ignite corporate opposition that Obama apparently wishes to avoid.

Clay Burell, Educaton Change - President Obama and Arne Duncan like to compare U.S. education - unfavorably, typically - to that of Korea, where I currently live. Here's an educational comparison they don't share: the number of uninsured people in America is roughly equal to the entire population of Korea, where all 50 million Koreans are covered by national health care.

Maybe, just maybe, health insurance for all is a factor in those dazzling Korean test scores. Maybe the tough love our education "reformers" urge we show toward our underprivileged students should be shown also to our vested health care interests, their lobbying millions be damned. . .

One of the best ways you can help improve public education and erase the achievement gap is to push for affordable health care for all.

The Senate Armed Finance Committee certainly isn't pushing for it for us - maybe because its chair, Montana Sen. Max Baucus, has taken more money from the health insurance and pharmaceutical lobbies than any other Democrat in Congress, and is excluding single-payer advocates from ongoing health care reform roundtable talks. . .

Do I have to say anything more than that healthy parents and children are likely to learn better than unhealthy ones? And that making health care accessible and affordable to the more than 45.7 million uninsured Americans - and the millions more who are underinsured - will create more healthy parents and children?

Penelope Lemov, Governing - According to the Boston Globe, a state commission is poised to recommend to the governor and the legislature that insurers radically change how doctors and hospitals are paid. They will recommend that the current system, in which insurers typically pay doctors and hospitals a negotiated fee for each individual procedure or visit, be replaced with a set payment for each patient that covers all that person's care for an entire year.

Variations of such a plan are being discussed for national health reform. Payment reform is seen as one of the more effective ways of taming costs. It could discourage doctors and hospitals from providing unneeded tests and treatments, and it could force the medical community to provide better post-hospital care so that patients who survive, say, heart surgery, aren't readmitted when their condition deteriorates because they didn't understand follow-up instructions. Massachusetts would be the first state to broadly adopt such a system.

M.S. Bellows, Jr, Huffington Post - Healthcare will continue to be increasingly expensive for consumers, but not quite as quickly as it was going to be. 7% per year inflation will become 5.5% per year inflation -- that is, if the participants keep their promise. Which, according to the officials, they'll do, not because there's any kind of enforcement mechanism - there isn't one - but simply because they're "Americans.". . .

The senior administration officials were hyperbolic, if not hyperventilated. One, focusing on the political battle to enact healthcare reform, called this promise by industry trade groups "a game changer."

The other official, focusing on economic issues, saw this as nothing less than the salvation of the entire federal budget:

"I don't think there could be a more significant step to help struggling families and to help the federal budget than reducing the growth rate of healthcare spending by 1.5 percentage points per year. . "

Remember, we're talking about slightly reducing the rate of growth in health care costs, not a reduction in health care costs themselves. . .

Am I the only one who is puzzled at the Administration taking these groups at their word? . . . Many of the groups participating in this initiative historically have opposed health care reform and are large donors to the Republican and Vichy Dem politicians who are preparing to mount a political and rhetorical battle against health care reform. . .

Robert Pear, NY Times - Robert Gibbs, the White House press secretary, said Mr. Obama had told the health care executives, "You've made a commitment; we expect you to keep it." If history is a guide, their commitments may not produce the promised savings. Their proposals are vague - promising, for example, to reduce both "overuse and underuse of health care." None of the proposals are enforceable, and none of the savings are guaranteed. Without such a guarantee, budget rules would normally prevent Congress from using the savings to pay for new initiatives to cover the uninsured. At this point, cost control is little more than a shared aspiration.

David Sirota, Open Left - In 2003, Obama said he supports a single-payer health care system, and that the only reason we "may not get there immiediately" is "because first we have to take back the White House, we have to take back the Senate, and we have to take back the House" - which, of course, we have. . .

In 2006, I spent a day with Obama in the U.S. Senate, and he said he supports a "debate" on single-payer, but that he also had started having doubts, now that he was in the Senate. . . Obama said that although he "would not shy away from a debate about single-payer," right now he is "not convinced that it is the best way to achieve universal healthcare."

By last week, it became clear that Obama and his allies in Congress will use their legislative leverage to prevent even a debate about single payer. . .

The whole idea that single payer is the best option but politically "impossible" is simply unacceptable. Last I checked, electing an African American president was politically "impossible". . . until Barack Obama went ahead and got himself elected president. The entire notion of "politically possible" and "politically impossible" is a canard that justifies the status quo. So while it's certainly terrific that Obama is fighting for some sort of universal health care system, and one with a public option (which could ultimately become a single-payer system), let's just remember: Nothing has been politically possible until it actually happened - and so if that's the major argument against single payer, it's not just a poor argument, it's a fraud
BREVITAS
CRASH TALK

NY Times - Nearly three months after President Obama approved a $787 billion economic stimulus package, intended to create or save jobs, the federal government has paid out less than 6 percent of the money, largely in the form of social service payments to states. Although administration officials say the program is right on schedule, they have actually spent relatively little so far. The stimulus bill has directly injected around $45.6 billion into the economy, mostly to help states cover the costs of Medicaid and unemployment benefits, one-time $250 checks that were mailed to Social Security recipients last week, and income tax cuts that began to take effect this spring.

MID EAST

Haaretz - Israel Police detained Haaretz correspondent Amira Hass upon her exit from the Gaza Strip, where she had been living and reporting over the last few months. Hass was arrested and taken in for questioning immediately after crossing the border, for violating a law which forbids residence in an enemy state. She was released on bail after promising not to enter the Gaza Strip over the next 30 days. Hass is the first Israeli journalist to enter the Gaza Strip in more than two years, since the Israel Defense Forces issued an entry ban following the abduction of IDF soldier Gilad Shalit in a 2006 cross-border raid by Palestinian militants.

ECO CLIPS

Current - The most spectacular stretch of coral reefs on the planet is in danger of collapse from climate change, overfishing and pollution, according to a report presented at the World Oceans Conference in Indonesia. Scientists consider the region known as the "coral triangle" to be the centre of marine life on Earth, teeming with fish and almost one-third of the world's coral reefs. Covering 1 per cent of the planet from South-East Asia to the Pacific, the area also supports about 100 million people. But in the past 40 years, 40 per cent of the coral reefs and coastal mangroves in the coral triangle have been lost because of pollution, coastal development and overfishing, said a University of Queensland professor, Ove Hoegh-Guldberg, who led the study commissioned by WWF. "It's an astounding amount," Professor Hoegh-Guldberg said. "At the moment the coral reefs are disappearing at about 1 to 2 per cent a year."

Tree Hugger - The new World Games stadium in Kaohsiung, Taiwan is just about completely covered in photovoltaics, to very dramatic effect. . According to the Taipei Times, "The generators will meet the stadium's power needs for lighting and air conditioning during the Games. When it is not hosting a sports event, the surplus electricity could be sold to Taiwan Power Co. . .

MEDIA

ABC News - Playboy, probably the most famous adult magazine, is struggling to stay alive and is about to undertake "radical changes" in what many see as a last-ditch effort to continue publishing. "It is clear that this company cannot continue to sustain significant losses in a business that now comprises less than one-quarter of the company's revenue base," Jerome Kern, interim chief executive for Playboy Enterprises said during an analyst conference call. . . Joe Francis, founder of the Girls Gone Wild video empire, said he has tried to purchase Playboy in the past and now doesn't consider the business salvageable. "Their overhead is astronomical. They have no core business that's attractive," Francis said. He blames the demise on Hefner, 83, who he said "refuses to change and evolve the brand" because of ego.

DRUG BUSTS

UK Press - Drug busts by the UK's organised crime fighting agency have helped to force dealers to hike their wholesale cocaine prices to record levels, its boss has claimed. Trevor Pearce, head of enforcement at the Serious Organized Crime Agency, said prices per kilo had jumped from L39,000 last year to more than L45,000 as a result of undercover work and seizure operations. But his findings come amid a warning that UK cocaine's purity level is currently the lowest on record, as gangs use increasing amounts of chemicals like insecticide and worming powder to dilute the drug.

SUSTAIN YOURSELF

Tree Hugger -According to Bicycle Retailer, Best Buy is about to start selling some electric bikes in some of its stores on the West coast. At first, e-bikes by Currie Technologies and Ultra Motor will be available. Currie Technologies will be stocking Best Buy with six different Izip models, ranging in price from $499-$2,000. The Southern California-based company will also provide Best Buy with two electric scooters at $299 and $599, according to Currie president Larry Pizzi. Mr. Pizzi adds that his electric bikes will be sold in 20 stores at first, but that a "larger roll out" was possible for the holiday season.

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